With Growing Call To Limit Health Costs, Lawmakers Consider Caps

Here’s WBUR’s Martha Bebinger’s take on emerging legislation to control medical costs:

There’s a growing call for the state to set limits on how much health care costs rise each year. House and Senate leaders joined the call yesterday, signaling that the bill they’re drafting will keep health care spending in Massachusetts in line with inflation or a similar economic measure.

House chairman of the Joint Committee on Health Care Financing, Steven Walsh, says holding spending increases in the range of 3 ½% is achievable and would give insurers, doctors and hospitals predictability.

“We’d look at a system that is very clear about what’s expected of them (insurers and providers)” says Walsh. We’d say, “we want you to achieve a certain goal within a certain period of time that would be negotiable. If you don’t achieve that, perhaps that’s when it should trigger an intervention to help move the market in the direction we think it needs to go to increase quality and save money.”

Walsh says the committee is still discussing how the state would intervene if costs rise above the cap. He and other committee members have grown tired in recent months of hearing from hospitals that are in the red and insurers who say they are just breaking even, while insurance premiums continue to rise 8-10% or higher.

Walsh’s Senate co-chairman Richard Moore says the bill will likely set quality targets to make sure hospitals and doctors focus on improving care while lowering costs. Moore agrees with Don Berwick that we are spending enough money on health care already but need to figure out how to spend more efficiently.

Global payments would likely be one option providers could use to improve patient health and lower costs, but Moore and Walsh say this approach won’t work for everyone.

Employer groups, including Associated Industries of Massachusetts support the idea of capping health care cost increases.

“One of our goals is to reduce health care premium costs, not just bend the cost trend,” says AIM’s Senior Vice President for Government Affairs, Eileen McAnneny. “There has to be clear metrics and some consequences if folks don’t meet those metrics.”

But some hospitals and physician groups worry about creating what they call “arbitrary” caps. Massachusetts Hospital Association President Lynn Nicholas says until providers are paid to manage a patient’s total medical expenses, assigning caps doesn’t make sense.

The payment reform bill filed by Governor Deval Patrick would not establish a ceiling for health care costs but would increase the Insurance Commissioner’s authority to review and reject contracts with unacceptably high increases. House and Senate leaders want to be more specific about what’s unacceptable.

Health and Human Services Secretary JudyAnn Bigby says the administration is “very willing to look at any proposal and understand where these defined targets come from. We’re working with the legislature to get something to the Governor this year because we think it’s imperative that we get a bill.”

By the way, the administration says it would cost $6.7 million to implement the Governor’s health care bill.

This discussion is playing out at Bunker Hill Community College where the state is holding a series of hearings on health care costs. To underscore the urgency of reigning in health care spending, Inspector General Greg Sullivan proposed giving the Insurance Commissioner additional contract review authority “as soon as possible” and working out other details of a cost control bill later.

Secretary Bigby said today that she has not reviewed Sullivan’s proposal and could not comment.

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